Em­pire re­thinks op­tions at Gin­gin

The West Australian - - WESTBUSINESS - Peter Wil­liams

Em­pire Oil & Gas is con­sid­er­ing its op­tions af­ter an at­tempt to restart its flag­ship gas-con­den­sate plant in the Perth Basin failed.

The Red Gully-1 well near Gin­gin has been out of ac­tion this month af­ter it be­came partly blocked in the af­ter­math of a pres­sure sur­vey.

Em­pire yes­ter­day said a ni­tro­gen gas lift in­tended to restart the flow was un­suc­cess­ful.

“The com­pany is now as­sess­ing var­i­ous al­ter­nate op­tions in­tended to restart the well,” chief fi­nan­cial of­fi­cer Rachel Rees told the Aus­tralian Se­cu­ri­ties Ex­change.

Em­pire re­quested a sus­pen­sion of its shares, say­ing it ex­pected to pro­vide an update by Septem­ber 13. The shares had been in a trad­ing halt since Mon­day.

Ms Rees said the po­ten­tial im­pact on the com­pany of the shut-in of the well would also be as­sessed.

Em­pire’s shares last traded on Fri­day at 12¢.

The oil and gas ju­nior said on Au­gust 18 that when the well was re­opened af­ter the pres­sure sur­vey, liq­uid was held up in the pro­duc­tion tub­ing, pre­vent­ing flow at the usual rate.

Con­den­sate, gas and wa­ter were pro­duced from the well over 10 days, but at in­suf­fi­cient rates.

New chief ex­ec­u­tive An­gus Walker said at the time that bring­ing the well back on­line quickly and eco­nom­i­cally was a pri­or­ity for Em­pire.

Be­fore the restart prob­lem emerged, Em­pire said on Au­gust 16 it was likely to im­pair the car­ry­ing value of Red Gully be­cause the sur­vey had shown a re­duc­tion in ul­ti­mate re­cov­ery of gas and con­den­sate.

Iron ore miner-con­trac­tor Min­eral Re­sources is Em­pire’s big­gest share­holder with a 19.4 per cent stake, which it bought from ERM Power a year ago for about $9 mil­lion at 45¢ a share.

The Em­pire Oil & Gas Red Gully-1 well near Gin­gin re­mains out of ac­tion.

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